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Bowen Hanes CIO Jay Bowen on how to find dividend-paying stocks overseas to boost investors’ portfolios.
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-- companies in the S&P 500.
Paid out a record 281.
Point five billion dollars in dividends in 2012 that's up 17%.
From 2011.
Were you one of those people who completely go frantic and panicked at the end of the year -- of the fiscal cliff.
You ditched her dividend paying stocks over fear of it and well may -- time to reexamine.
Well we think a couple things we think it's important look globally and global companies not only domestic companies -- global companies we dividends we think that.
Global GDP is gonna expand quite a bit fashion -- US GDP we've got a coordinated recovery going on in Asia with China.
Stimulus going they're looks like returning towards a percent growth there Japan.
And dividend of Ireland prime minister doesn't -- release another fiscal or monetary plan.
It's been -- Australia so if you can find those companies that are.
That are leveraged to not only the domestic market but really to global GDP growth OK I want -- -- they're gonna work for -- -- find out what have you found I -- you're looking at a name say for example like you know we see a good example would be Unilever not only are they globally oriented they've -- ever have to revenues coming from emerging markets not just developed markets were from emerging markets.
And there also and select a 170 -- Countries around the world so it's a real global.
He was in the consumer products area and it yields about three point 1%.
Another important point on the dividends I wanna make sure.
I think this is going to be a major trend going forward and it's gonna express itself between thirteen of the dividends and account for a larger and -- larger share of the stock's total return.
Now it might not be your grandfather's.
Portfolio where might have accounted for -- anywhere stock actually gone up in price.
If you look after stocks' total return -- think.
We're heading headed back towards not the fifties maybe that -- -- follows four Poehler were accounted for say half of the stock total return got it.
I'm I think that's an important trend and it ties into the dividend payout ratio that we're seeing last year that the dividend payout ratio.
Increased sharply to 30%.
And I think we're training probably towards historical average of 50% there.
And it also tells and a subdued economic growth in our country -- imports of dividend.
We -- showed some of the top dividend payers of course here in the US and and the -- always jumps out of -- because people make a big deal of the dividend of frontier communications.
You know that's just couldn't.
It's been slammed and hammered it's it's had some trouble it's now a four dollar 36 cent.
Price here we we like Maggie Wilderotter she's a Smart leader and all but Ed but you can't do you say just five for the dividend.
Now have not at all not at all I really think it's important to look at the company into -- in in total you've got to it's gotta have some.
Good capital appreciation potential to -- -- -- funny a lot of opportunities in Canada.
As a matter of OK so let's get to that TransCanada -- one of your picks here but why oh Canada listen Canada.
Coming I hate to say this that they surpassed the US on the -- economic freedom index -- ahead of us now for number six they really should be what are the metrics for the economic freedom index -- less regulation and it's a whole menu.
Trade policy monetary policy fiscal policy regulatory policy and that's great for businesses it's great and they ought to be our fiscal role model they only the G -- fiscal role model really to tell you the truth I mean it's incredible if you look at.
Government spending federal spending is and so their economy if you look at.
Federal debt as a percent of their economy if you look at corporate taxes they're all trending in the right direction from a pro growth standpoint and much better.
In the US and -- and the country also has enormous natural resources so OK got the natural resources which is very you know huge OK but then you don't wanna become like -- Australia where everything depends on that specifically.
Where does Canada rank as a compares to Australia.
Very similar in terms of the of the natural resource country and it's reflected in their strong currency.
As Australians had over the last few years -- particular relative relative to the US dollar.
They do have a lot of natural resource companies but they have other companies to -- -- superb financial companies the banks.
Didn't get in all the trouble that we got in they had very attractive didn't.
And we've made that point in the past that Canada.
Did not allow they had enough good regulation Smart not over regulated but Smart regulation -- did allow their banks take major crazy bets on on things like sub prime -- Royal Bank of Canada looked good.
Some of the other financial -- -- my -- in that realm that we like bank of Nova Scotia okay.
And that's a really interesting story and and indices which he said they did not have policies to designed to inflate.
They're housing sector via their financial sectors have experienced -- there also one more thing on candidates it's possible to play China through Canada.
That the Chinese growth story company like tech resources yes which is diversified mining company -- the second largest exporter of metallurgical coal and that's key to to fueling the Chinese steel industry so that's an -- Yeah metallurgical coal as it's huge in Canada and natural -- tech.
Resources is the one the -- tech resources lack resources yes.
